JOHANNESBURG (miningweekly.com) - There were currently ‘loads and loads’ of gold-company acquisition opportunities, which would be considered once debt levels were lowered, Harmony Gold CEO Graham Briggs said on Friday.

Briggs said that Harmony had been looking at assets on which to do due diligence studies in the past six months, but that the tempo of pursuit had quickened significantly in the September quarter

There were many juniors, exploration companies and even larger gold companies that were stressed.

“There are loads and loads of opportunities out there,” Briggs said.

Harmony Gold did not plan to increase its debt levels “in the next while” in order to make an acquisition, but foresaw that it would be in a position “sometime in June” to look more seriously at acquisition opportunities.

CFO Frank Abbott forecast that Harmony’s net debt would be down to R224-million by the end of June, from R2,3-billion in the September quarter.

Briggs did not believe that finance would become available to stressed assets before that time and that Harmony was considering going on to site to carry out its due diligences.

“We see our decreasing debt as a major advantage, and we plan to get it down to a very low level in June and that’s when we think we will be in a good position to do something,” Briggs said.

Asked whether this would be in South Africa or abroad, Briggs said that it had been “very good” to be in the gold mining industry in South Africa in the last month in particular, when there had been record rand gold prices.

“With a weakening rand, South Africa is a good place to operate in,” he added.

But the company was not out to acquire any “dogs”, of which it had had its fair share in the past, and would be focusing on longer-life, better-quality assets.

Also, Harmony would not restrict itself to South Africa alone, as it was also bullish about gold in dollar-price terms.

“Therefore, internationally, we need to continue to look, and hunt out and seek potential acquisitions,” Briggs said.

The company reached its target of 12 t of gold this quarter, up 6% with a 4% better grade.

Masimong was the star performer and Elandsrand was in “intensive care”. What to do with the troubled Target gold mine would be decided in the next six months, but it was not a candidate for disposal.

Cash operating costs were up 9% in rand terms, mainly owing to increased electricity and labour costs.

Cash operating profit was down by 19% for the quarter to end September.

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